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Book fulfillment: technology for tall orders.

Top-notch technology and efficient systems can propel you to success with on-the-premises operations.

The questions publishers face in deciding on book fulfillment procedures can be overwhelming....

* Which is a better choice, an in-house system or a fulfillment house?

* If fulfillment on the premises seems like the way to go, what kind of computer configuration should be installed?

* What software can handle current needs but also allow for future growth?

* How are hardware and software choices affected by the need fulfillment staff has for sharing information with other divisions and departments?

* What staff configuration is needed for the entire operation?

The answers vary depending on the particulars of the publisher. A look at the way in which the American Psychiatric Press, Inc. (APPI), handles its book fulfillment functions, and a glance back at the development of our process, may offer you insights for dealing effectively with your situation.

Hefty fulfillment

APPI, the 12-year-old publishing arm of the American Psychiatric Association (APA), Washington, D.C., employs a staff of 38, enjoys market-driven sales in the neighborhood of $8 million per year, has a back list of approximately 500 titles focusing on various aspects of mental health, and publishes 40-50 new titles annually. APPI is organized into four major departments: editorial, prepress (production), marketing, and operations. In a typical month, the operations department processes 4,250 orders representing 34,000 units, receives 70 complaints, accrues net sales of $620,000, and applies a similar amount in cash receipts.

Along with order processing/fulfillment, the operations department handles customer service and credits/collections. These three divisions of operations are inextricably connected. If order processing makes a mistake (or the warehouse ships the wrong book), both customer service and credits/collections will most likely be involved in straightening it out.

For the last six years, APPI has used a local area network (LAN) and The Cat's Pajamas software to handle book fulfillment. We've upgraded our equipment, software, and operating systems a number of times during this period (and, no doubt, will continue to evolve), but the basic elements of the system have remained constant.

Today we're able to efficiently handle twice the number of orders we processed in 1986. The old system required us to run a time-consuming program at the end of each workday or when a quota of orders was achieved, whichever came first. As everyone had to be off the system while it "did its thing"--sometimes for as long as four hours--operations became severely handicapped whenever the limit was attained before closing time. Our current system has no such constraints. If the volume of orders were to quadruple, we might need to hire more order processors and even establish shifts, but our computer system could accommodate the increase with no strain.

Operations: Distribution of duties

Order processing/fulfillment. APPI's fulfillment manager directs the order processing/fulfillment functions with four operations assistants, who process orders, print and monitor batches of invoices and picking sheets before they go to the warehouse, and reconcile daily cash receipts. The fulfillment manager is responsible for entering data relative to books, authors, and customers. All that follows (invoices, reports, customer discounts and payment terms, author royalties, standing order releases, and so forth) is predicated on this original input. The fulfillment manager is also responsible for computer outputs (invoices, promotional mailing labels, statements, aged accounts receivable, sales reports, and marketing analyses) and serves as the liaison with the warehouse.

Customer service. The customer service division, staffed by two employees, handles inquiries and complaints, grants permission for returns, and basically resolves problems. Our computer system enables staff to tell inquiring customers (almost instantaneously) when, how, and where their orders were shipped and what was contained in the shipment. Customer service keeps track of the number and types of mistakes (wrong item, short shipment, and so forth) made within a given month. A copy of this report goes to the other operations divisions and to our warehouse. Using this kind of monitoring, we're able to focus on problem areas and change procedures if needed. Our current error rate (counting both order processing errors and warehouse shipping errors) is under 2 percent of total orders processed, which compares favorably with the industry standard of 4 percent.

Credits/collections. Cash application, credits, refunds, and dunning efforts for receivables are handled by the two people in the credits/collections division. APPI has a 99.6 percent collection rate, achieved without an agency. While a good number of our orders are prepaid, the remaining receivables require skillful collectors. Our software provides a lot of on-screen assistance, with a "memo pad" for each customer. On the memo pads we usually note such things as "Sent copy of invoice #146204 to Janet--4/30/93," or "Ray swears a check for $542 is in the mail--6/19/93."

The order of operations

1. Interacting with marketing staff. Operations' part of the publishing process commences with the marketing of each book. And marketing begins just as soon as a title and a list price have been determined. Operations personnel coordinate with marketing staff to produce the response device (the order form) incorporated in direct mailings, catalogs, advertisements, and other promotional materials. They work together to ensure that the information captured with the order allows us to do more than simply process that order. We need to know such things as which promotion, which list, and what demographic criteria succeeded or failed. We also need information that helps us target each respondent for future sales, based on the title ordered, the subject area, or other relevant criteria.

2. Taking orders by phone. About 65 percent of APPI's orders come in across the 800 lines. Our operators use programs that let them look up past buying patterns as well as capture data relative to the customer, source, items ordered, and payment. Most of the phone orders we receive are from individual customers who prepay by credit card, but increasingly we are getting institutional, bookstore, and wholesaler orders by phone. These customers are encouraged to send confirming purchase orders (many are faxed in) to make it easier for us to collect.

To enhance customer service, we use a sequencer with our 800 number. The recorded message notifies callers that they've reached the American Psychiatric Press, Inc., and that their calls will be taken in turn. This allows operators (and customers) to complete transactions without interruption.

3. Handling mail orders. We pay close attention to sorting the mail by type of order: small prepaid orders, purchase orders, foreign distributors' consignment orders, orders from wholesalers with whom we have contracts, and so forth. This promotes efficiency, ultimately improving service to customers.

4. Working with the warehouse. APPI uses the contracted warehouse and shipping service of Professional Mail Distribution Services (PMDS), Jessup, Maryland. Once the order has been entered into the computer system, it is released, generally in a batch; then the invoices, packing slips, labels, and picking sheets are printed. These outputs are monitored and sorted, then forwarded to PMDS, where the orders are picked, packed, and shipped out. Before bank cards are printed, credit card orders are transmitted by batch electronically to the bank. (This is accomplished using a modern and special programs that interface with bank programs.) Minutes later the batch is transmitted back to APPI with individual authorization codes.

We put quite a bit of time and effort into our selection of a warehouse, knowing full well the horrible ripple effects from something going wrong at this point of operations. Shipping the wrong book leads to a customer service call, then a new shipment, then sometimes a credit, all because of an error that might have been prevented in the first place. Consequently, a first-rate warehouse and staff are extremely important.

Our warehouse contract provides for storage space, protection against damage, and necessary equipment. It covers monthly computerized inventories (beginning, receipts, issuances, ending), which we can compare with our system inventories, and an annual physical inventory. Our contract also specifies shipping methods, packaging, turn-around times, and special requests. We track various indices to measure errors on the part of the warehouse and provide the warehouse with regular feedback, both positive and negative.

The warehouse receives initial inventory directly from the printers. Warehouse staff verify overall condition, quantity received, and individual piece weight, then relay this information to APPI. The fulfillment manager enters into our system the inventory and weight. (The shipping charges for all but prepaid orders are calculated on actual book weights plus a given percentage for packaging material.) The manager then releases the back orders and standing orders for the particular item.

Compatible computerization

Technology has been key to our entire operation for quite a long time, but our route to the right computer configuration wasn't wrinkle-free. Our computer saga involved some false starts, beginning with an attempt in 1983 to use software written by APA's information systems department for the association's mainframe. That proved to be a disaster, primarily because the mainframe was a dinosaur. There were software limitations as well, because the customized book fulfillment programs were only as good as the combined knowledge, communication skills, and efforts of the programmers and fulfillment staff involved. Even with a crackerjack programmer and a fulfillment expert, if the programmer doesn't understand fulfillment's requirements, or if the fulfillment expert has no comprehension of a computer's possibilities, the results are likely to be disappointing.

Blessedly, the dinosaur died in 1984 and APA invested in a new mainframe. APPI opted to buy a separate minicomputer-based turnkey system designed for publishers. This was an improvement and served us well for a time, but eventually APPI's growth and corresponding demands on the system taxed the minicomputer beyond its capabilities. The day we unplugged it in 1987, the turnkey system was essentially unchanged. Neither its hardware nor software had been enhanced since installation almost four years earlier. Yet, during that time, technology had undergone enormous development, the publishing world had evolved considerably, and APPI had more than doubled its annual sales. The turnkey computer company hadn't kept pace with any of it, and we were determined that our next computer system would grow--not just with us, but with the publishing and computer industries as well.

The next approach we took to technology turned out exceptionally well and still suits us today. The system is based on a local area network (LAN) and software called The Cat's Pajamas. The hardware is flexible and easy to adapt to many processing requirements. The software met our original needs in 1987, and continual innovations with the software have kept our system in tune with changing needs. (For those who have never heard of The Cat's Pajamas, don't let the whimsical name mislead you. This is serious software, in use by many publishers and for very good reason.)

The LAN advantage

The LAN offers us some distinct advantages. Each personal computer workstation can execute The Cat's Pajamas programs, word processing packages, spreadsheets, data base management programs, desktop publishing programs, and just about anything else. The LAN can be expanded by adding more file servers, workstations, disks, and printers--it's virtually unlimited.

The LAN has made it easy for our system to grow. We started with one file server and just a few workstations confined to the order-entry staff. Over time, the LAN steadily expanded to cover our entire organization. At present our LAN comprises two dedicated file servers, a tape drive, two power supplies, a workstation for every APPI employee, a dedicated print server, and a wide assortment of printers.

Our LAN doesn't require much maintenance. APPI calls on a free-lance systems expert for installations, upgrades, and system problems. A maintenance contract covers the more expensive components of the LAN. Two employees are designated, in addition to their primary functions, to serve as liaisons with the systems expert, maintenance contractor, and software representatives. They are responsible for routine LAN administration: handling equipment and software purchases, backing up files, adding users, adding workstations and printers, and taking the system down when necessary.

Finding the software solution

The trend today in all business systems is away from information systems departments and customized software in favor of specialized software from outside vendors. It makes a world of difference when the software you use is designed specifically for book fulfillment by experts in both programming and publishing.

The business relationship formed with the purchase of software for publishing must stand the test of time. Basic necessities like training, documentation, and support require a stable software organization that will continue to provide service. And, as APPI learned with its minicomputer turnkey system, software that is dynamite today may be obsolete five years from now if the software provider does not keep up with both technology and evolving trends in publishing.

A number of computer systems cater to publishing needs. The challenge is to find the best system "fit" for your particular niche. Oftentimes consultants are hired to recommend the "right" software. But computer consultants, often not on top of the business side of publications, may simply redefine a business problem as a technical problem. They may distort the process and waste everybody's time jousting with the software vendors.

On the other hand, the software search may be complicated by the vendors. Some may pitch the "my-tech-is-higher-than-their-tech" line. All love to describe the features of their systems, and a "features war" among vendors can ensue. They can also inject fear--or, at least, uncertainty--by making something sound more complicated than it really is. When considering vendors, it's important to check their references. Request a complete client list, as vendors naturally are inclined to spotlight only their showcase sites.

If using a computer consultant and surveying all software vendors can be counterproductive, where does that leave you? Well, why not seek out a few publishers that are in your league and find out what they're using and why. Users often know more about systems than the people who sell them. Users can talk about results: what works for them and what doesn't. They can talk about productivity, and they can speak your language rather than use incomprehensible technical jargon. While, on paper, most business systems sound the same, in practice there's a welter of fine distinctions that can make one system a better fit for you than another, and you have to see the system in action to appreciate it.

When evaluating a prospective system, determine--by asking users--the vendor's track record for installations, support, continuing innovation, and documentation. Inquire--again, of the users--about levels of productivity achieved. Ask both vendor and users about the functionality of the programs. How do they work? Is there a logical flow of functions? Do the programs cover all your needs? The market offers many options to publishers for computer systems. The only "right" one is the one that's right for you.

Maximum control and communication

Today, with in-house computer systems employing publication programs, publishers can do their own information processing as efficiently as any outsider. And this gives control of the information back to the publisher.

There are several other benefits. The instant access to shared data encourages superior communication and coordination among all publication functions--operations, marketing, prepress, and editorial. Good software packages allow the various departments to work efficiently together using information relating to sales, customers, finances, authors, titles, promotions, and so forth.

The combination of a LAN and the right software serves the needs of not only APPI's operations but of other departments as well. While each department uses the LAN and software most appropriate to its respective function (for example, editorial uses text editing software; prepress uses desktop publishing; marketing uses graphics), each employee has access to the up-to-the-minute information found in operations' data files. Additionally, these data files are routinely downloaded into Q&A (database soft, IQ (report generator), and Lotus (spreadsheet) to facilitate whatever manipulation or output of data is desired by any individual in any department. For example, marketing might want to produce a comprehensive order form, listing just the author, title, price, and order number of all our books in print. These data can be gathered from the book file that is regularly downloaded into Q&A. In literally seconds an ASCII file can be produced with precisely the information desired, in whatever sequence is fancied. The ASCII file can then be imported into PageMaker or the like, where standard elements of order forms (name and address lines, payment information, and so forth) can be added.

Another example: Operations might want to compare various payment methods over a specified period of time. With IQ it's easy to obtain cash receipts for the last fiscal year, categorized with totals and percentages by check, MasterCard, Visa, and American Express.

A good system also allows for greater control over procedures, policies, and performance. Some days, of course, absenteeism, system problems, or unusual volumes of work present pressures that make you wish an outside fulfillment house handled it all, because then the problems would be theirs. But difficulties of this nature will occur in any setting, and ultimately they are always the publisher's problem. When the operation is on the premises, the publisher is forced into an awareness of problems as they occur and can respond in a manner that is best for the customer and the organization.

System payoffs

The payoffs of APPI's system extend to enhanced sales, thanks to the scope of information available to marketing. List rentals are facilitated by regularly down-loading the mail file and sending it to our list broker. And the comprehensive information our system provides regarding prepublication orders, sales histories, and low inventories has resulted in savings in print-buying.

Here's one example of system-sparked sales gains: For APA's annual meeting, where APPI sets up a bookstore, the book file is downloaded to Q&A and data are manipulated to correspond with bar codes on the books. The resulting file is downloaded to cash registers equipped with scanners. This technology permits us to bypass the old method of pricing thousands of books and manually programming registers. We're able to efficiently handle the high volume of sales at the annual meeting. We're also able to obtain on-site valuable information regarding meeting sales and remaining book inventories.

Computers are wonderful machines. They lend themselves perfectly to so many tasks associated with order processing/fulfillment, customer service, and credits/collections. When the system is humming, we can take charge, be informed. A working system gives us power. By the same token, when the computer is down or the integrity of its data is violated, life can quickly become a nightmare.

Aside from the routine common-sense procedures you must take to protect any computer system (such as backing up the system and keeping a maintenance contract), there are a couple of recommended procedures specific to systems for publishing operations:

* Remember that nothing beats using the old-fashioned eyeball to monitor invoices, audit trails, and month-end reports provided by software.

* Record major indices and compare them against the norm for any unusual jumps or slumps.

A final word of advice: Keep your customers in mind. Ask them for feedback. You can do this via a questionnaire randomly included with shipments. You can also generate a quick computer report of customers who ordered from you recently, then call or write and ask if they were pleased with the service or have any suggestions. Either method will generate the outside input so critical to monitoring your system's effectiveness.

Beth Prester is operations manager for the American Psychiatric Press, Inc., and circulation director for the American Psychiatric Association, Washington, D.C.
COPYRIGHT 1993 American Society of Association Executives
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
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Author:Prester, Beth
Publication:Association Management
Date:Jul 1, 1993
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